AFCI 430 Problem Set – Exam 1 Review
1. Which of the following employees of a commercial printer/publisher would be classified as
direct labor?
a. Book binder
b. Plant security guard
c. Sales representative
d. Plant supervisor
e. Payroll supervisor
2. Norwood Appliance produces washers and dryers in an assembly-line process. Labor costs
incurred during a recent period were: corporate executives, $100,000; assembly-line workers,
$80,000; security guards, $18,000; and plant supervisor, $30,000. The total of Norwood’s
direct labor cost was:
a. 80,000
b. 98,000
c. 110,000
d. 128,000
e. 228,000
3. Clinton Corporation recently produced and sold 50,000 units. Fixed costs at this level of
activity amounted to $50,000; variable costs were $100,000. How much cost would the
company anticipate if during the next period it produces and sells 48,000 units?
a. 144,000
b. 146,000
c. 148,000
d. 150,000
4. Which of the following costs would not be classified as overhead for a company that produces
small appliances?
a. Assembly labor
b. Plant supervisory labor
c. Indirect material costs
d. Plant utilities
5. Under a traditional costing system, which of the following costs would likely be classified as
indirect with respect to the various products manufactured?
a. Plant maintenance
b. Factory supplies
c. Utilities
d. Machinery depreciation
e. All of the above
6. Which of the following statements about manufacturing cost flows is false?
a. Direct materials, direct labor, and manufacturing overhead are entered in the WIP
inventory account.
b. The finished goods inventory account will contain entries that reflect the cost of goods
sold during the period
c. The cost of units sold during the period will typically appear on the income statement
